Custom term paper Lufthansa

In the contemporary business environment the company needs to take into consideration socio-cultural trends. In this respect, it is worth mentioning the fact that one third of workforce is non-German. This fact is extremely important for the organizational culture of the company because the high level of non-German employees in the staff of the company implies that the company operates in a multicultural environment. The large share of employees with a different cultural background forces the company to develop new management styles and strategies that can be effective in different cultural environment. In this regard, the company implements two strategies. First, the company trains and promotes local managers to manage employees respectively to their cultural traditions and needs. Alternatively, the company transfers managers to new regions and trains them to teach to work in a multicultural environment. To increase the effectiveness of the management in the multicultural environment, the company develops universal standards that meet cultural needs and norms of representatives of different ethnic groups and cultures. In addition, it is possible to recommend the company to use knowledge sharing strategy when people with different cultural background work and train together and through their interaction they learn to cooperate effectively, regardless of their cultural differences.
At this point, it is worth mentioning the fact that continuous education and training for employees and managers is one of the integral elements of the strategic development of the company. Lufthansa pays a lot of attention to education and training of its employees and managers because investments in education and training can bring considerable profits due to the potential improvements and innovations employees and managers can bring into the organizational performance. In addition, the training and education of employees and managers lead to the consistent improvement of the quality of services delivered by the company to its customers. The high quality of services, in its turn, raises the customer loyalty, which is essential for the stable marketing performance of the company, especially in the contemporary, highly competitive business environment. Moreover, well-trained and educated employees and managers are more effective in regard to the formation of a positive brand image through the high quality of services and positive company-customer relationships.
Another effective tool to improve the marketing performance through the improvement of the brand image and company-customer relationships is the development of social and environmental projects. In actuality, the company operates in the industry vulnerable to severe criticism from the part of the public interested in the protection of environment. This is why Lufthansa needs to invest into the development of environmentally friendly technologies and sponsor various events and social programs to prove customers that the company does care about the protection of environment.
However, the major problem and challenge Lufthansa is currently facing are economic forces and threats, which undermine the marketing performance of the company. For instance, the current development of the banking industry prevents the company from receiving bank loans at low interest rates because banks are suffering from negative effects of financial crisis. As a result, the company is limited in its financial resources and cannot develop its business as fast as the company plans. custom term paper
At the same time, the marketing performance and financial position of the company is affected by terrorist attacks, which have provoked severe crisis in the early 2000s, after 9/11. Many airlines cannot recover after terror attacks till present days. In actuality, Lufthansa has to increase funding of security systems to insure safety of customers and to minimize the risk of terrorist attacks.
In addition, the financial position and marketing performance of Lufthansa deteriorates because of natural disasters and epidemics, such as the Swine Flu epidemic, which decreased substantially the flow of passengers especially to and from America. The situation is deteriorated by the high unemployment rate which increases the pressure on the company from the part of the state and unions which oppose to any attempt of the company to cut jobs to save money. Finally, the high oil prices undermine the position of the company consistently, especially of oil prices skyrocket.
On the other hand, along with economic, Lufthansa has to take into consideration political and legal trends. The company is limited in its opportunities to receive foreign direct investments because EU and non-European ownership is limited to 49% that prevents the company from sale of a larger share of its stocks to a non-European investor that could improve the financial position of the company consistently. In addition government taxes and government fines limit the opportunity of Lufthansa to enter new markets because local governments conduct protectionist fiscal policies. Nevertheless, in Germany and the EU, Lufthansa can count for the government funding, which helps the company to overcome negative effects of the economic recession. Alternatively, the company can count for tax credits which help Lufthansa to use its financial resources effectively.
Furthermore, technological trends affect the performance of Lufthansa significantly. Customer to business interfacing implies the introduction of new, advanced technologies to make flights more comfortable for customers than in rival companies. The company has to maintain cost reduction that limits its opportunities to introduce innovations. Nevertheless, the company attempts to improve site functionality through provision of a larger number of services to its customers. Furthermore, the flexible booking process and online booking facilitates purchase and booking of tickets online that attracts customers to company’s services. In such a way, the company implements its customer relationship management strategy which is focused on the improvement of the company-customer relationship and formation of a positive brand image.
Finally, it is important to dwell upon the competitive rivalry. Today, the company competes with such rivals as the British Airways, Qantas and other large companies operating worldwide. Today, Lufthansa faces the problem of the high competition and the airline market is saturated. Nevertheless, in such a situation the threat of new entrants persist, while the company still cannot exit markets fast and effectively because of high exit barriers. In such a situation, the company has to spend substantial financial resources on the maintenance of its current competitive position.
Thus, Lufthansa confronts numerous financial and organizational problems. Today, the company has to maximize its efforts to maintain its current competitive position and to carry on its international market expansion strategy.

 
Works Cited
Calder, S. No Frills: The Truth behind the Low Cost Revolution. LA: Touchstone, 2002.
Littman, T. “Evaluating Transportation Equity.” World Transport and Practice, 8:2, 2002.
Stewart, G. Airline Industry Today. New York: Random House, 2008.